Not long after Google launched its new Google+ social network, chairman Eric Schmidt made an interesting comment about the company’s plans for the new offering: He said Google wanted its new social network to become “an identity service,” one that would be connected to everything the company did. Since then, Google has followed through on that pledge by integrating Google+ into each of its services and by fighting to get users to use their real names instead of pseudonyms. But Google isn’t the only one who wants to become an identity platform: Facebook is well on its way to being just that, and Twitter and LinkedIn have also been making moves in that direction. Welcome to the online identity race.
These moves by Google, Facebook, Twitter and LinkedIn are only the latest in a long line of attempts to corner the market on online identity: Over the past decade advocates of open-source solutions have tried to promote identity platforms like OpenID, with limited success; Microsoft tried with what it called Passport, but users were leery of giving so much control to a single company. That is also one of the challenges for the contestants in the current race: Will users be willing to give a single company control over their identity? Only time will tell, but the race to lock up the identities of web users — and thereby get access to their data and the potential benefits it brings — is accelerating.
Why identity is the holy grail for online businesses
The web giants of today want to control the online identity market for the same reason Microsoft wanted to in the late 1990s: Becoming the default identity provider allows you to get a piece of all kinds of transactions that occur online, since you become like an identity bank. But with today’s web leaders, the impulse is also driven by a desire for the currency of the new social web: namely, data. By providing free tools that can connect a user’s identity on Google+ or Facebook or Twitter to their activity on millions of sites, these companies get access to a hugely valuable stream of real-time information about what those users are doing, and that information makes it easier to appeal to advertisers and their desire for targeted demographics and interests.
Becoming the custodian of that kind of data also has risks, however, as Facebook has discovered. The giant social network has been criticized by many — and even sued by some and investigated by others — over its data-handling practices, in particular its reported penchant for tracking users even when they are logged out of the site and keeping a record of when they click the Like button and other activity. Google and Twitter have so far stayed mostly out of the spotlight, but they are bound to come into it eventually: Google, for example, just changed its privacy rules to allow the company to track users and their data across all of its various services and platforms.
Regardless of the risks, the players have already started their sprint, in part because owning online identity is the only way that free services like Facebook, Google, Twitter and LinkedIn can generate enough revenue to pay for the millions of servers they need to run their networks. Advertisers want to target consumers more specifically than even Google’s search algorithms allow them to, and being able to create a profile of them and their online activity is one way to provide that information.
Here is a breakdown of what each player is doing and what its prospects are.
Facebook was arguably the first out of the gate with an attempt to commandeer the online identities of its users, with the rollout of the Facebook platform — also known as the “open graph” — at its f8 developers conference in 2010. The tools launched at the conference gave websites and publishers the ability to integrate Facebook elements into their sites, so that users could click a button and Like a page or a piece of content (which in turn posted that activity to their Facebook page). But even more important was that sites could give users the ability to log in with their Facebook identities, and then sites could integrate those identities in various ways.
Facebook has since expanded its identity services by adding the ability to integrate Facebook comments into a site, which a number of media companies have adopted as a replacement for their own commenting systems. It has also expanded with the recently launched “frictionless sharing” capabilities that websites and services can offer, which send a stream of activity from the app directly to Facebook. Each of these connects the service more deeply to Facebook and allows the site to aggregate data about the behavior of millions of its users. More apps are coming that will add even more information about likes and dislikes, all incredibly valuable data for advertisers. But will users revolt because Facebook knows too much?
Google started with the ill-fated OpenSocial, but its real bet on owning identity is Google+. Although the network is designed to make it easy for users to share photos, status updates, music and other services, the real impetus for Google in creating it was to get access to the kinds of “social signals” that users provide to a social network like Facebook. Whereas search used to be all about links and PageRank, the rise of social tools has changed the nature of the industry and made it much more about recommendations from a user’s social graph and other signals of what Google likes to call “intent.” That is what advertisers care about, and therefore it is what Google cares about as well. Many believe this was one of the main reasons why Google was so adamant about requiring real names from users.
Since the launch of Google+, the company has been following through on Schmidt’s promise to make it an identity platform. Google+ logins and profiles — as well as the services Circles — have been integrated into Gmail and other services. But the most controversial integration occurred recently when Google started showing Google+ content in its main search results, part of a new feature it called “Search plus Your World.” Critics, including Twitter and Facebook, have pointed out that the new feature mostly promotes Google+ rather than actually showing social results from multiple sources.
That kind of integration of another service into its market-dominating search business could wind up triggering an even closer investigation of the company by antitrust authorities in Washington and elsewhere — a case that is already under way. The more Google tries to accumulate user data to compete with Facebook as an identity portal, the more it runs the risk of looking like a monopolist that is using its dominance in search to move in on a new market, namely social search. But the lure of all of those social signals from users is too strong for the company to resist.
Twitter hasn’t taken quite as many steps as either Facebook or Google when it comes to establishing itself as an identity platform, but it is not far behind: Users can already log in to other websites and services with their Twitter credentials, and the @ name system that the network uses is becoming more commonplace even on other services as a shorthand way of referring to someone. For example, Amazon launched a new feature for its authors called @Author, which allows readers to chat with an author directly from their Kindle.
This is something that Twitter is clearly interested in pursuing. The company recently introduced a new feature that integrates authorized Twitter accounts into music services such as Spotify and Rdio, allowing users to see tweets and interact with artists directly through those services. And while Twitter, unlike Facebook and Google, does not require a real name in order to use the network, the company is pushing its “authorization” service for certain users, something that seems clearly designed to promote the network as an appropriate place for advertising.
Like Twitter, LinkedIn has not made as many steps into the identity arena as Google or Facebook, but it recently made it clear that it has intentions in that area by launching a platform that looks and feels like Facebook’s “open graph.” As with that platform, LinkedIn offers developers the ability to build identity services into their sites, which then allows users to log in with their LinkedIn profile, see the activity of others in their network displayed on the third-party site, and share their activity back to their LinkedIn stream.
In a sense, LinkedIn is trying to become the business-side equivalent of Facebook. The only question is whether that is what users want. That remains to be seen: So far LinkedIn isn’t saying how well its offering is being received.
The bottom line
There is no question that Facebook has a strong lead in the identity race: Not only does it have 800 million users who are used to spending large amounts of their online lives inside the network but its platform and other features have had huge uptake already. It has the largest “installed base.” But Google is the world’s largest search engine, and it is clearly planning to use that dominant market position to make the Google+ network the default login and identity platform. Twitter and LinkedIn, meanwhile, are smaller players by far, but they each have their strengths.
The victor will have to have not only the size and market reach that Facebook and Google bring to the table but also the kind of trust that will encourage users to effectively turn over their online identities to a single company — a level of trust that neither Google nor Facebook can boast of just yet, given some of their failures in the past. And while Twitter and LinkedIn may have the trust of their niche users (at least so far), they lack the size required to become truly dominant players.
The one thing we can count on is that this race will only heat up. It may be in its early stages, but the stakes are substantial, and everyone wants to be in the winner’s circle.